Anheuser-Busch Companies Reports Record Sales And Earnings For Second Quarter And First Six Months Of 2001.Business Editors ST. LOUIS--(BUSINESS WIRE)--July 25, 2001 Led by a continuation continuation - continuation passing style of strong revenue growth in domestic beer operations and significant contributions from the international beer segment, Anheuser-Busch Companies, Inc. (NYSE NYSE See: New York Stock Exchange :BUD) achieved record sales and earnings for the second quarter and first six months of 2001, it was announced today by August A. Busch Busch , Adolf Georg Wilhelm 1891-1952. German-born Swiss violinist and conductor best known for his work as leader of the Busch Quartet, an internationally acclaimed chamber group formed in 1919. III, Chairman of the Board and President. Second quarter and first six months earnings per share were up 11.5 percent and 12.2 percent, respectively, compared to last year. All of the company's business segments contributed to the company's earnings per share growth in the second quarter and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. . "Our excellent financial performance in the second quarter represents the company's eleventh In music or music theory an eleventh is the note eleven scale degrees from the root of a chord and also the interval between the root and the eleventh. Since there are only seven degrees in a diatonic scale the eleventh degree is the same as the subdominant and the interval consecutive quarter of double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. earnings per share growth. Anheuser-Busch's consistent, dependable double-digit earnings per share growth has been achieved despite changes in the economic environment. We look forward to continued strong performance in the remainder of the year and achieving our 12 percent earnings per share growth target for 2001," said Mr. Busch. Domestic revenue per barrel barrel: see English units of measurement. grew 3.8 percent in the second quarter, and 3.2 percent for the first six months of 2001, compared to respective periods last year. Revenue per barrel has now increased by 2 percent or more for eleven consecutive quarters. The growth rate accelerated in the first half of 2001 based on the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. industry environment and Anheuser-Busch's successful strategy to reduce discounting while continuing to gain market share. "Our consistent increases in revenue per barrel reflect the company's sharp focus on beer profit margin growth," said Mr. Busch. "Anheuser-Busch's gross profit and operating profit margins Operating profit margin The ratio of operating profit to net sales. increased 100 basis points during the second quarter vs. last year, and return on capital employed Return on capital employed (ROCE) Indicator of profitability of the firm's capital investments. Determined by dividing Earnings Before Interest and Taxes by (capital employed plus short-term loans minus intangible assets). has increased significantly over the past twelve months vs. the prior period." Domestic beer sales-to-wholesalers volume increased 1.1 percent for the second quarter of 2001 vs. the second quarter 2000, and 1.6 percent for the first six months of 2001. Wholesaler sales-to-retailers volume for the second quarter plus the first week in July July: see month. was up 1.2 percent, and increased 0.8 percent year-to-date. Including the first week of July eliminates the distortion distortion, in electronics, undesired change in an electric signal waveform as it passes from the input to the output of some system or device. In an audio system, distortion results in poor reproduction of recorded or transmitted sound. in sales-to-retailers caused by the key 4th of July holiday falling mid-week in 2001 vs. 2000. These comparisons are impacted by an exceptionally strong first half of 2000, when sales-to-retailers volume increased 3.9 percent over the prior year. The company expects sales-to-wholesalers and sales-to-retailers to be up about 1.5 percent for the full year. The company's reported beer volume is summarized in the following table:
Reported Beer Volume (millions of barrels)
Second Quarter Six Months Ended June 30
vs. 2000 vs. 2000
2001 Barrels % 2001 Barrels %
Domestic 26.1 Up 0.3 Up 1.1% 50.3 Up 0.8 Up 1.6%
International 2.1 Up 0.2 Up 9.3% 3.7 Up 0.3 Up 8.6%
Worldwide
A-B Brands 28.2 Up 0.5 Up 1.7% 54.0 Up 1.1 Up 2.1%
Int'l Equity
Partner Brands 4.6 Up 0.5 Up 11.4% 8.6 Up 1.0 Up 13.5%
Total Brands 32.8 Up 1.0 Up 3.0% 62.6 Up 2.1 Up 3.5%
Consistent with the company's practice of implementing annual
price increases in two phases, the company is currently evaluating
opportunities for selected pricing actions in the fourth quarter 2001.
The scope of the revenue enhancement initiatives, which will again be
tailored to specific markets, brands and packages, has not been
finalized.
SECOND QUARTER 2001 FINANCIAL RESULTS
Key operating results for the second quarter 2001 versus 2000 are
summarized below:
(in millions, except per share)
Second Quarter 2001 versus 2000
2001 2000 $ %
Gross Sales $3,923 $3,799 Up $124 Up 3.3%
Net Sales $3,381 $3,266 Up $115 Up 3.5%
Operating Income $808 $748 Up $60 Up 7.9%
Equity Income, Net of Tax $78 $63 Up $15 Up 24.2%
Net Income $524 $478 Up $46 Up 9.6%
Diluted Earnings per Share $.58 $.52 Up $.06 Up 11.5%
A discussion of financial highlights for the second quarter 2001
follows:
-- Gross sales increased $124 million, or 3.3 percent, and net
sales increased $115 million, or 3.5 percent, compared to the
second quarter 2000. Domestic beer net sales increased 5 percent
for the second quarter.
Operating income increased $60 million, or 7.9 percent versus
the second quarter 2000, reflecting higher revenue per barrel
and domestic beer sales volume, along with continued improved
results for international beer, packaging and entertainment
operations.
International beer segment net income was up 26 percent in the
second quarter 2001, compared to 2000. Operating profits for
international beer operations, which exclude equity investments
in Grupo Modelo and Compania Cervecerias Unidas S.A. (CCU),
increased in the second quarter, primarily due to volume gains
in China and Canada. Equity income, net of tax, increased $15
million, or 24 percent, to $78 million, during the second
quarter 2001 due to strong underlying volume and earnings growth
by Grupo Modelo.
Packaging segment operating profits were up $1.4 million, in the
second quarter 2001, primarily due to continued lower can
manufacturing costs.
Entertainment segment operating results for the second quarter
2001 increased $13.5 million vs. the prior year primarily due to
increased attendance, greater in-park spending by guests and the
impact of the new Discovery Cove park, which began operations in
July 2000.
-- Net income increased $46 million, or 9.6 percent, during the
second quarter 2001 versus the same period last year. Diluted
earnings per share for the quarter were $.58, an increase of
$.06, or 11.5 percent, compared to the second quarter 2000.
Earnings per share benefited from the company's ongoing share
repurchase program.
FIRST SIX MONTHS OF 2001 FINANCIAL HIGHLIGHTS
Key operating results for the first six months of 2001 compared to
2000 are summarized below:
Six Months Ended June 30 (in millions, except per share)
2001 2000 2001 vs. 2000
$ %
Gross Sales $7,397 $7,099 Up $298 Up 4.2%
Net Sales $6,362 $6,077 Up $285 Up 4.7%
Operating Income $1,463 $1,330 Up $133 Up 10.0%
Equity Income,
Net of Tax $126 $102 Up $24 Up 23.9%
Net Income $918 $828 Up $90 Up 10.9%
Diluted Earnings
per Share $1.01 $.90 Up $.11 Up 12.2%
A discussion of financial highlights for the first six months of
2001 follows:
-- Gross sales increased $298 million, or 4.2 percent, and net
sales increased $285 million, or 4.7 percent, compared to the
first six months of 2000. The domestic beer, international beer
and entertainment business segments contributed to the sales
increase.
-- Operating income increased $133 million, or 10.0 percent versus
the first six months of 2000, reflecting higher revenue per
barrel and domestic beer sales volume, along with improved
results for international beer, packaging and entertainment
operations.
International beer segment net income was up 29 percent in the
first six months of 2001 compared to 2000. International beer
operating profits increased primarily due to volume gains in
China and Canada. Equity income, net of tax, increased $24
million, or 24 percent, to $126 million, for the first six
months 2001 due to strong underlying volume and earnings growth
by Grupo Modelo.
Packaging segment operating profits, excluding the adjustment
related to the label manufacturing business in 2000, were up $5
million in the first six months of 2001. This increase is
primarily due to lower can manufacturing costs.
Entertainment segment operating results for the first six months
of 2001, excluding the gain on the sale of SeaWorld Cleveland,
were up $21 million vs. the prior year primarily due to
increased attendance, increased in-park spending and the impact
of the new Discovery Cove park, which began operations in July
2000.
-- The effective tax rate for the first six months was up slightly,
to 38.6 percent, primarily due to the impact of the write-off of
non-deductible goodwill associated with the sale of SeaWorld
Cleveland.
-- Net income increased $90 million, or 10.9 percent, for the first
six months 2001 versus the same period last year.
-- Diluted earnings per share for the six months were $1.01, an
increase of 12.2 percent, compared to the first half of 2000.
Earnings per share benefited from the company's ongoing share
repurchase program. The company repurchased over 16 million
shares in the first six months of 2001.
BEER SALES RESULTS
Worldwide Beer Volume
Worldwide Anheuser-Busch beer sales volume for the second quarter
2001 rose to 28.2 million barrels or 1.7 percent, versus second
quarter 2000. Beer volume was up 2.1 percent, to 54 million barrels
for the first six months of 2001. Worldwide beer volume is comprised
of domestic volume and international volume. Domestic volume
represents Anheuser-Busch beer produced and shipped within the United
States. International volume represents exports from the company's
U.S. breweries to markets around the world, plus Anheuser-Busch brands
produced overseas by company-owned breweries and under license and
contract brewing agreements.
Total volume, which combines worldwide Anheuser-Busch brand volume
with equity volume (representing the company's share of its foreign
equity partners' volume), was up 1.0 million barrels, or 3.0 percent
in the second quarter 2001, and up 2.1 million barrels, or 3.5 percent
year-to-date in 2001. Beginning in the first quarter 2001, equity
volume includes the company's pro rata share of CCU.
Domestic Beer Volume
Anheuser-Busch reported domestic beer sales-to-wholesalers of 50.3
million barrels, an increase of 800,000 barrels, or 1.6 percent for
the first six months of 2001. This increase was led by Bud Family
sales, especially Bud Light.
Beer Market Share
The company's domestic market share (excluding exports) for the
first six months of 2001 was 48.1 percent, an increase of 0.4 share
points over 2000 market share of 47.7 percent. Domestic market share
is determined based on industry sales estimates provided by the Beer
Institute.
International Beer Volume
Anheuser-Busch international beer volume, excluding Modelo and
CCU, increased 200,000 barrels, or 9.3 percent for the second quarter,
and 300,000 barrels, or 8.6 percent for the first six months of 2001.
These increases are primarily the result of volume growth in China and
Canada.
Other Matters
Anheuser-Busch will conduct a conference call with investors to
discuss these results at 3:00 p.m. (Central Time) today. The company
will also broadcast the conference call live via the Internet. For
details visit the company's site on the Internet at
www.anheuser-busch.com.
This release contains statements regarding the company's
expectations concerning its future operations, earnings and prospects.
These statements are forward-looking and involve significant risks and
uncertainties, and accordingly, no assurances can be given that such
expectations will be correct. These expectations are based upon many
assumptions that the company believes to be reasonable, but such
assumptions may ultimately prove to be inaccurate or incomplete, in
whole or in part. The company disclaims any obligation to update any
of these forward-looking statements. If the company determines to
update any forward-looking statement, it will do so publicly. No
private statements by the company or its personnel should be
interpreted as updating forward-looking statements. Further
information on factors that could affect the company's future
operations and earnings is included in the company's Forms 10-Q and
10-K.
Comparative Statement of Earnings
Second Quarter and Six Months Ended June 30, 2001 and 2000
(In Millions, Except Per Share)
Second Quarter Year-to-Date
2001 2000 2001 2000
Gross Sales $3,923.1 $3,798.9 $7,396.8 $7,098.5
Excise Taxes (541.8) (533.4) (1,034.9) (1,021.1)
Net Sales 3,381.3 3,265.5 6,361.9 6,077.4
Cost of Products
and Services (2,009.9) (1,973.9) (3,873.2) (3,753.6)
Marketing, Distribution
and Administrative
Expenses (563.7) (543.4) (1,043.6) (993.4)
Gain on Sale
of Business -- -- 17.8 --
Operating Income 807.7 748.2 1,462.9 1,330.4
Interest Expense (91.7) (90.7) (183.3) (177.4)
Interest Capitalized 7.4 8.3 14.6 15.2
Interest Income 0.3 0.1 0.5 0.4
Other (Expense)
/Income, Net (0.7) 3.8 (4.2) 3.1
Income Before
Income Taxes 723.0 669.7 1,290.5 1,171.7
Provision for
Income Taxes (276.8) (254.5) (498.2) (445.2)
Equity Income,
Net of Tax 77.5 62.5 125.8 101.5
Net Income $523.7 $477.7 $918.1 $828.0
Basic Earnings
Per Share $.59 $.53 $1.03 $.91
Diluted Earnings
Per Share $.58 $.52 $1.01 $.90
Capital
Expenditures $272.7 $262.1 $578.7 $541.6
Depreciation
and Amortization $205.7 $195.1 $409.0 $387.9
Weighted Average
Shares:
Basic 892.4 904.9 895.5 908.2
Diluted 903.3 917.0 906.9 919.9
Business Segments
Second Quarter Ended June 30, 2001
($ in Millions)
Domestic Int'l Pack- Enter- Corporate
Beer Beer aging tain. Other & Elims. Consol.
2001
Gross Sales $3,128.3 187.7 534.9 268.9 36.3 (233.0) $3,923.1
Net Sales:
- Intersegment -- -- $222.1 -- 10.9 (233.0) $ --
- External $2,618.7 155.5 312.8 268.9 25.4 -- $3,381.3
Income Before
Income Taxes $746.3 23.4 31.9 65.7 5.3 (149.6) $723.0
Equity Income,
Net of Tax -- $77.5 -- -- -- -- $77.5
Net Income $460.2 91.9 19.7 40.7 3.3 (92.1) $523.7
2000
Gross Sales $3,002.4 182.8 546.3 252.5 37.0 (222.1) $3,798.9
Net Sales:
- Intersegment -- -- $212.1 -- 10.0 (222.1) $ --
- External $2,494.9 156.9 334.2 252.5 27.0 -- $3,265.5
Income Before
Income Taxes $707.5 16.8 30.5 52.2 5.9 (143.2) $669.7
Equity Income,
Net of Tax -- $62.5 -- -- -- -- $62.5
Net Income $438.6 72.9 18.9 32.4 3.7 (88.8) $477.7
Business Segments
Six Months Ended June 30, 2001
($ in Millions)
Domestic Int'l Pack- Enter- Corporate
Beer Beer aging tain. Other & Elims. Consol.
2001
Gross Sales $6,021.7 325.5 1,029.6 396.6 55.2 (431.8) $7,396.8
Net Sales:
- Intersegment -- -- $416.9 -- 14.9 (431.8) $ --
- External $5,038.6 273.7 612.7 396.6 40.3 -- $6,361.9
Income
Before Income
Taxes $1,420.5 34.8 57.9 63.2 3.9 (289.8) $1,290.5
Equity Income,
Net of Tax -- $125.8 -- -- -- -- $125.8
Net Income $878.2 147.3 35.8 33.6 2.4 (179.2) $918.1
2000
Gross Sales $5,767.3 311.2 1,014.6 363.2 57.3 (415.1) $7,098.5
Net Sales:
- Intersegment -- -- $398.5 -- 16.6 (415.1) $ --
- External $4,794.2 263.2 616.1 363.2 40.7 -- $6,077.4
Income
Before Income
Taxes $1,349.7 21.2 38.6 24.7 5.1 (267.6) $1,171.7
Equity Income,
Net of Tax -- $101.5 -- -- -- -- $101.5
Net Income $836.8 114.6 23.9 15.3 3.2 (165.8) $828.0
SOURCE: Anheuser-Busch Companies, Inc. |
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